Because we are generous, and probably hate reading even more than you do, we went ahead and made a couple of graphs to sum up the article. But let’s set the stage first.

Let’s break California’s public debt into three categories: debt from bonds and loans, debt from unfunded pension obligations, and debt from other retirement benefits like retiree health insurance.

California’s official estimate of those three totaled to $832 billion, and was divided like so: But there’s a problem. The people who make these estimates are either idiots, or willfully lying to the public about the anticipated returns the assets funding the pension plans.

The California Policy Center reworked the numbers on unfunded pension liabilities with some more realistic anticipated rates of return, and came up with these numbers:

See that huge jump in the purple area? That represents how the unfunded pension liabilities of California are nearly 3 times as high as the state government is admitting to.

In case you’re counting, that jump (from $258 billion to $713 billion) takes the state debt to $1.29 trillion.

$1.29 trillion!

The main cause of this is that CALPERS, the agency responsible for making the initial idiotic projection, estimates their returns at 7.5%. The California Policy Center uses a number based on the Citigroup Pension Liability Index – the same numbers used by the Big Three credit rating groups like Moody’s. That number is 4.4%, and it makes all the difference.

We should point out that it’s not only ill-advised to use such a high-risk system, but is also probably illegal for a private entity to do. At the least, it would open up a corporation to lawsuits from shareholders, etc.

Thank you for continuing to call attention to this very serious problem. When I try to talk about it with friends (and many of them receive or will receive their pensions from government funds) the usual reply is, well, the government will just have to come up with the money somehow.
“Somehow”, although not spelled out, would be a huge tax increase.
Right. And what do they want the government to tax? Thank God and Howard Jarvis, they can’t really raise the property taxes (and also because they haven’t been able to do so in the past, no matter how hard they try).
What taxes can be levied or raised that people will vote for (2/3 majority)? Reminds me of the Beatles song “Taxman”….
For people who like to suffer (in a good cause), here’s more information along with what other locations are considering:http://www.pensiontsunami.com/
Couldn’t have come up with a better name myself.

full disclosure: I am a public employee. I also believe in good governance which is why I wish for fair pensions that do not break the public treasury.

Having said that, I will, as one of your readers has previously accused, dismiss the above information. The reason is the source. The source is a right-wing think tank dressed as a non-profit.

If the source had been the right-wing talkers or funders themselves, that is one thing. I think that discussion can be had on the merits of whatever we are talking about. But this conversation starts with deception, and btw, is made through an anonymous blogger.

The bottom line of these discussions is this. The reason wealthy industrialists who made their money off of their parents and intend not only to keep it, but to see their wealth grow at rates beyond inflation focus on public unions and public pensions is they have won the battle over their own employees. They don’t like their employees to see what is possible for their wives or friends in the public sector. That’s the bottom line folks. They don’t wish for a rising tide to lift all boats, on the contrary, they are quite happy with where wealth inequality is today and they don’t intend to favor any policies which would change this.

The California Public Policy Center (formerly the California Public Policy Center) is a right-wing pressure group based in California Founded in June 2010, it is a state affiliate of the $83 million right-wing State Policy Network (SPN), a web of state pressure groups that denote themselves as “think tanks” and drive a right-wing agenda in statehouses nationwide.[1] See SPN Members for more..
Although SPN’s member organizations claim to be nonpartisan and independent (kinda like THC himself), the Center for Media and Democracy’s in-depth investigation, “EXPOSED: The State Policy Network — The Powerful Right-Wing Network Helping to Hijack State Politics and Government,” reveals that SPN and its member think tanks are major drivers of the right-wing, American Legislative Exchange Council (ALEC)-backed corporate agenda in state houses nationwide, with deep ties to the Koch brothers and the national right-wing network of funders.[2]
In response to CMD’s report, SPN Executive Director Tracie Sharp told national and statehouse reporters that SPN affiliates are “fiercely independent.” Later the same week, however, The New Yorker’s Jane Mayer caught Sharp in a contradiction. In her article, “Is IKEA the New Model for the Conservative Movement?,” the Pulitzer-nominated reporter revealed that, in a recent meeting behind closed doors with the heads of SPN affiliates around the country, Sharp “compared the organization’s model to that of the giant global chain IKEA.” She reportedly said that SPN “would provide ‘the raw materials,’ along with the ‘services’ needed to assemble the products. Rather than acting like passive customers who buy finished products, she wanted each state group to show the enterprise and creativity needed to assemble the parts in their home states. ‘Pick what you need,’ she said, ‘and customize it for what works best for you.'” Not only that, but Sharp “also acknowledged privately to the members that the organization’s often anonymous donors frequently shape the agenda. ‘The grants are driven by donor intent,’ she told the gathered think-tank heads. She added that, often, ‘the donors have a very specific idea of what they want to happen.'”[3]
A set of coordinated fundraising proposals obtained and released by The Guardian in early December 2013 confirm many of these SPN members’ intent to change state laws and policies, referring to “advancing model legislation” and “candidate briefings.” These activities “arguably cross the line into lobbying,” The Guardian notes.[4]

CALIFORNIA POLICY CENTER SITE:

Doubt any of this? Take a look at their site.
May’s news a)UC administration fails transparently test” (topic failed government agency) b)Unelected Coast Commission violates property rights while keeping California thirsty. (this could be written by local right-wing player Matthew Owen) c) The union role in our growing taxocracy. (points for derivative creativity – “taxocracy” HAH!) d) Democrats snub working poor by killing licensing reform (I knew all along it was our fault, I just needed the Koch bros to finally show me the light) e) 25 UC Retirees Receive Annual Pensinos Exceeding $300,000. (I agree with this problem, but how do we deal with this? A: not by destroying pensions for those that need it.)

Also, side by side with the “Latest California News” is “Union Watch”. But of course. It’s all about capital vs labor and labor has lost. Do they really need to rub it in? Of course they do, but they can’t do it with their own names attached, so they fund faux think tanks like the “California Policy Center”.

CALIFORNIA POLCY CENTERS “ABOUT US”:

Robert W. Loewen, Chairman An attorney licensed in California since 1975. … He specialized in business litigation with an emphasis on environmental and appellate cases and is still consulted on constitutional issues concerning personal freedom. Robert Loewen is chairman of the Lincoln Club of Orange County, where he has been a member for over 20 years. He served as President of the Lincoln Club from 2009 to 2013.

David L. Bahnsen, Board Director. David L. Bahnsen is founder, Managing Director, and Chief Investment Officer of The Bahnsen Group, a private wealth management boutique based in Newport Beach. (Nuff said, THC, you expect your readers to listen to a proprietor of a “wealth management boutique” on populist economics?!?”

The list goes on and on and on. I’ll spare you and refer you instead to their site.

Information matters, it’s why there is an attack on media. Our bosses, the job creators, need leverage in their negotiations with their employees, or, more honestly, they’d rather not negotiate at all and pay us what they feel is fair. Something they would like to argue is fair because they are fair. Well, although they have most of the cards after the Reagan revolution, it doesn’t have to be this way. We don’t have to live in the wealthiest country on earth while it doesn’t feel like anything of the sort to many or most of us.

That’s why, it’s my humble opinion that the truth is, this site should make you mad. And sometimes, yes, one can dismiss an argument based on it’s source.

Are we fighting for equivalent transparency between public and private sectors now? Huzzah! Where can I find what the salaries and profits are for private companies that earn huge chunks of their salaries off of public funds. I’m thinking of my former employer City Cab/ City Ambulance as just one example. Maybe once we have this THC and I can finally compete when he posts the latest outrage in public salaries. I’ll post the latest outrage in how much local businesses put in the bank at the end of the year.